KBC Market Research Desk
KBC Bank
Headlines
Industrial production in Poland disappointed...
... and made a rate cut in October almost certain
August industrial production figures released yesterday confirmed ongoing economic slowdown in Poland and preconditions for a rate cut in October declared by the central bank (NBP) earlier this month now appear to be met. Industrial growth fell short of market expectations as it dipped to -1.9 % Y/Y (the worst result since March 2013). Even though the figure improves to 0.7 % Y/Y after seasonal adjustment and although it was adversely influenced by a surprising and possibly only temporary dip in car productions, the overall trend has not been positive in recent months. We therefore stick to our view that the NBP is likely to cut interest rates both in October and November, each time by 25 basis points. We also perceive pending risks as skewed towards more pronounced easing in months and quarters to come. As for the market reaction to weak industrial performance, while the zloty barely moved after the release, Polish government bonds yields dropped by 4 basis points yesterday.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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